Technical Outlook: The USDJPY was seen testing the previous resistance level near 113.58 last week. Price action was showing signs of exhaustion near this level. We expect to see some moderation in the rally as USDJPY could once again retrace the gains. The sideways price action within 113.58 and 112.07 could mean a potential breakout from this level in the medium term. To the upside, the next resistance level is seen at 114.60, while to the downside, a break down below 112.07 could signal a move towards the 110.91 level of support. In the near term, we expect USDJPY to retrace as it is expected to test 112.70. Fundamental Outlook: Economic data from Japan is quiet with no major news releases of interest. Following last week's decision by the Bank of Japan to leave interest rates and monetary policy steady, the Japanese yen is expected to remain rather muted during the week ahead. The Japanese markets are also expected to slow down. However, end of year flows and balancing of the books could lead to some volatility in the Japanese yen. Lack of macroeconomic fundamentals will likely see the Japanese yen focusing on the broader global themes which could put some significant risk on the currency. Previous USDJPY Weekly Forex Forecast

USDJPY Weekly Forex Forecast - 25th to 28th Dec 2017